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. Last Updated: 07/27/2016

China to Fund $800M Kazakh Pipeline

ALMATY, Kazakshtan -- The Kazakh state oil firm said Thursday its Chinese counterpart had agreed to finance an $800 million oil pipeline from western Kazakhstan to northwestern China and construction works would start in mid-2004.

The pipeline may become the first major oil supply link running from an ex-Soviet state to the giant, fast-growing energy consumer. Russian oil major Yukos has agreed with China to supply it with oil from Siberia, but Russia's government has not yet approved the proposed route.

The new pipeline is also seen as a major boon for landlocked Kazakhstan, which hopes to triple crude output to more than 3 million barrels per day by 2015 but may face serious export bottlenecks with time.

"The route from western Kazakhstan to China is now coming to the forefront. It looks like the situation around Yukos has played its role," Kairgeldy Kabyldin, managing director of Kazakhstan's oil and gas holding KazMunaiGaz, told reporters.

"A joint decision has been adopted together with [China's state oil firm] CNPC to start construction of the oil pipeline in the middle of next year," he added.

CNPC officials could not be immediately reached for comment.